Question

Which of the following procedures would the auditors most likely perform to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet?

1) Observe the consistency of the employees' use of cash registers and tapes.
2) Inquire about employees' access to recorded but undeposited cash.
3) Trace deposits in the cash receipts journal to the cash balance in the general ledger.
4) Compare the cash balance in the general ledger with the bank confirmation request.

Answer 1

The auditors would most likely perform the procedure of observing the consistency of the employees' use of cash registers and tapes to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet.

Step-by-step explanation:

The auditors would most likely perform the procedure of observing the consistency of the employees' use of cash registers and tapes to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet. This involves monitoring how the employees handle cash transactions, ensuring that they are recording all cash sales and using cash registers and tapes consistently.

Inquiring about employees' access to recorded but undeposited cash is also a relevant procedure, but it focuses on a different aspect of control testing—specifically, the safeguarding of cash.

Tracing deposits in the cash receipts journal to the cash balance in the general ledger and comparing the cash balance in the general ledger with the bank confirmation request are procedures that relate more to the accuracy and existence of cash rather than the completeness of cash receipts.